Frequently Asked Questions: Off-Budget Provisions
Aren’t SUNY and CUNY State agencies, and wouldn’t their expenditures be subject to appropriation pursuant to Article VII of the State Constitution?
The provisions of Article VII have been interpreted, through statute and case law, to indicate that not all revenue available to State entities must be deposited in the State Treasury and expended pursuant to appropriation.
Why is some campus-generated revenue left on budget?
Residence halls have remained appropriated due to some unresolved issues related to bond covenants. All other appropriations are State tax support, federal funds, or internal service funds.
Why does the Governor propose removing SUNY and CUNY from the appropriation process, while maintaining an appropriation process for public benefit corporations such as HESC?
The Governor’s proposal recognizes that tuition, fees, and other campus-generated funds are not State-generated taxpayer revenue, but rather user fees paid to the universities for educational purposes. State spending is reduced by upward of $3 billion by investing all tuition, fees, and other self-generated revenues in SUNY campuses rather than having them annually appropriated by the Legislature, thereby benefiting the State’s credit rating and cash flows.
Aren’t there other agencies that are similar in nature?
Yes, various State agencies collect fees.
Why are those agencies subject to the appropriation process?
In general, tax revenues available to State agencies are subject to appropriation. However, by statute, exceptions have been made from time to time with respect to other revenue. For instance, the State Finance Law authorizes the expenditure without appropriation of monies held by a State agency or officer, title to which is not held by the State. In addition, it authorizes the Commissioner of Taxation and Finance to pay without appropriation monies collected by the Commissioner from cigarette sales and user taxes, and authorizes payment without appropriation of monies transferred to the universal prekindergarten reserve fund.
What is the constitutional and legal basis for allowing campus generated revenue accounts to be held directly by SUNY?
Not all revenue available to State entities must be deposited in the State Treasury, such as monies held as part of the principal of an endowment held by SUNY. These are not state taxpayer dollars but user fees earned or paid to the universities. These fees, which have been diverted for other purposes, would now fund programs for students and faculty.
How are savings measured in relation to energy performance, procurement, or supply contracts, and where would the money come from to be deposited into a SUNY-held account?
The intent is that if a campus saves money through, for example, purchase and installation of an energy management system, the savings would stay with the campus and not be taken from their allocation. SUNY may receive revenues from entities with which SUNY contracts to build and operate co-generation and other energy management system.
What is the mechanism by which SUNY and CUNY would pay their employees under this new structure? Have all parties involved signed on to the process and agreed that it is workable?
SUNY employees would continue to be State employees and SUNY would seek to enter an agreement with the Office of the State Comptroller to continue to process paychecks as currently managed. SUNY would transfer funds on a frequent basis to cover such payroll expenditures. Employees would notice no change in their pay, benefits, or the manner in which their pay is received through direct deposit or check.
Isn’t this essentially just the privatization of a public university system?
No, SUNY remains a vital public entity and a strategic partner with New York State. This is simply providing SUNY with the financial independence to operate in a more efficient manner.
Parts of this text are adapted from materials provided by the State University of New York.